Welcome to the March edition of our newsletter. As I’m sure you’re aware, Chancellor, Philip Hammond, delivered his first Spring Statement on Tuesday 13 March. Here we take a look at some of the key points and how they may affect you.

We hope this information is useful to you. If you want to discuss any of the points raised here, or any other aspect of your financial planning, please get in touch.

The 2018 Spring Statement – a summary

Presenting his first Spring Statement to Parliament, the Chancellor gave an upbeat outlook for the UK. With upgraded growth forecasts and predictions of falling inflation, debt and borrowing, he offered the prospect of a boost to public spending later this year.

Saying there is “light at the end of the tunnel”, the Chancellor rejected his ‘Eeyore’ nickname and announced he was “positively Tigger-like” about the UK’s fortunes. Staying true to his word, he didn’t confirm any major tax or policy changes, but did announce several consultations and reviews in areas such as tax, spending and the future of cash in the new economy.

"The UK economy will grow faster this year than previously forecast."

The Chancellor said he would take “a balanced approach” to bear down on debt and keep taxes low. He also said the UK economy will grow faster this year than previously forecast and the deficit will be around £5 billion lower. But, according to the Office for Budget Responsibility (OBR), the overall economic and fiscal picture is “broadly the same”. The OBR also revised its growth projection in 2018 from 1.4% to 1.5% and lowered its forecast for borrowing in 2017-18 to £45.2 billion, from the £49.9 billion that was predicted in November.

Some of the consultations announced around tax included one to explore how online platforms can “help their users to pay the right amount of tax”, and a call for evidence on how to tax single-use plastics. The Treasury also published suggestions for how the UK government could tax large digital businesses, along with proposals to ensure that online companies pay value added tax owed.

The Chancellor also announced the Government has reached an agreement with local authorities to distribute funds from its £4.1 billion Housing Infrastructure Fund.

"The Chancellor said he would take a ‘balanced
approach to bear down on debt and keep taxes low."

Key points at a glance

Growth forecast for 2018 revised from 1.4% to 1.5%

Inflation forecast to fall from 3% to 2% by the end of the year

Wages expected to rise faster than prices over the next five years

Government borrowing for 2017-18 £4.7 billion lower than predicted in November, at £45.2 billion

Borrowing forecast to fall every financial year, to £21.4 billion in 2021-22

Cost of debt interest payments remains around £50 billion a year

Budget for Housing Growth Partnership to be more than doubled to £220 million

So far, £1.5 billion allocated to departments to prepare for Brexit in March 2019

Consultation on tax charges to discourage single-use plastics

Consultation on new VAT collection mechanism for online sales

Ideas set out for “fairer” taxation of multi-national digital businesses

Next revaluation of business rates to be brought forward to 2021

Consultation launched on the role of cash in the new economy, including future demand for 1p and 2p coins and £50 notes